The purpose of this loan is to enable farmers to adopt practices that will lead them to a more sustainable farming system. Loans are for capital purchases, which enhance the environmental and economic viability of the farm. Eligible purchases may include: rotational grazing systems, tree plantings, on-farm energy production, composting equipment, solar-powered equipment, low-cost livestock housing, hoop buildings, processing equipment, reduced or no herbicide weed control, equipment to handle cover crops, alternative fertilizer management equipment, soil conserving equipment and more.
When considering a proposed project ask the following three questions:
If the answer to these questions is yes and the project pertains directly to your farming operation it is likely that your proposal will be eligible. Loans under this program will be made only to residents of the State of Minnesota who are actively engaged in farming.
The maximum loan per farm family is $40,000. On joint projects funding will be $40,000 per farmer up to $160,000 total, whichever is less. A fixed interest rate of 3% will be charged. Loans will be made for future capital purchases. Operating expenses or refinancing of existing debt is not eligible. The term of the loan will match the expected life of the collateral but will not exceed 7 years. Payments will be on a semi-annual schedule. The State requires a 2 to 1 collateral to loan ratio. Other farm equipment may be offered as additional first lien collateral to obtain the required 2 to 1 ratio.
Applications will be reviewed for eligibility by a loan review panel that consists of the following individuals:
The review panel will score each application using the Evaluation Profile. Qualifying applications will then be reviewed by the Ag Marketing & Development Division for creditworthiness. This is a competitive program so all applications will be scored on their relative merit in each category. Give special attention to the Evaluation Profile when formulating ideas for your application. Keep in mind that the application is what the review panel uses to make recommendations. Please give descriptive details about your operation and project.
Please Note: Our continued funding depends on repayment from existing loans. Applications are accepted and reviewed throughout the year. We realize farmers need to make timely decisions when making purchases. For this reason a purchase can be made after the application has been sent to us and before the review panel meets and still qualify under this program. We cannot, of course, commit to approving a loan until the loan review panel has met and the applicant's ability to repay the loan has been assessed. Hopefully this will allow the flexibility you need to make good management decisions.
To complete your application we need you to include the following information: a current cash flow projection of your farming operation, the last three years of Federal Income Tax Form 1040, a signed balance sheet and the signed application.
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If you have questions concerning the application and the program call the Agricultural Marketing and Development Division at: 651-201-6012. Completed applications should be sent to:
Sustainable Agriculture Loan Program
Minnesota Department of Agriculture
625 Robert Street North
St. Paul, MN 55155-2538
Please keep a copy of your application for your own records. Submitted applications will not be returned. Thank you for your interest in this program.
Ag Marketing & Development Divison
Minnesota Department of Agriculture (MDA), 625 Robert Street N, St. Paul, MN 55155-2538, firstname.lastname@example.org